Questions from Auditing and Assurance

Q: What segregation of duties would you recommend to attain maximum internal control

What segregation of duties would you recommend to attain maximum internal control over purchasing activities in a manufacturing concern?

Q: Do you believe that the normal review of purchase transactions by the

Do you believe that the normal review of purchase transactions by the auditors should include examination of receiving reports? Explain.

Q: The client’s cost accounting system is often an important part of the

The client’s cost accounting system is often an important part of the CPAs’ audit of the financial statements of a manufacturing company. For what purposes do the auditors consider the cost accounting...

Q: What part, if any, do the independent auditors play in

What part, if any, do the independent auditors play in the planning for a client’s physical inventory?

Q: What are the purposes of the auditors’ observation of the taking of

What are the purposes of the auditors’ observation of the taking of the physical inventory? (Do not discuss the procedures or techniques involved in making the observation.)

Q: For what purposes do the auditors make and record test counts of

For what purposes do the auditors make and record test counts of inventory quantities during their observation of the taking of the physical inventory? Discuss.

Q: Once the auditors have completed their test counts of the physical inventory

Once the auditors have completed their test counts of the physical inventory, will they have any reason to make later reference to the inventory tags used by the client’s employees in the counting pro...

Q: The auditors’ verification of plant and equipment is facilitated by several factors

The auditors’ verification of plant and equipment is facilitated by several factors not applicable to audit work on current assets. What are these factors?

Q: What documentary evidence is usually available to the auditors in the client’s

What documentary evidence is usually available to the auditors in the client’s office to substantiate the legal ownership of property, plant, and equipment?

Q: Nolan Manufacturing Company retains you on April 1 to perform an audit

Nolan Manufacturing Company retains you on April 1 to perform an audit for the fiscal year ending June 30. During the month of May, you make extensive studies of internal control over inventories. All...